The Maryland Order of Abatement of Legacies and Devises

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by  Russell R. Reno

Maryland Law Review
Volume 17|Issue 4 Article 2
The Maryland Order of Abatement of Legacies and
Devises
Russell R. Reno
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Russell R. Reno,The Maryland Order of Abatement of Legacies and Devises, 17 Md. L. Rev. 285 (1957)
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Maryland Law Review
VOLUME XVII FALL, 1957 NUMBER 4
THE MARYLAND ORDER OF ABATEMENT
OF LEGACIES AND DEVISES
By RussELL R. RENO*
Because of the usual lapse of time between the date of
the execution of a testator's last will and the date of his
death, the executor often finds that the assets available for
distribution among the legatees and devisees are insuffi-
cient to satisfy all of the provisions in the will as contem-
plated by the testator. This may be due to: (1) the fact
that the estate was depleted between the date of the execu-
tion of the will and the testator's death, or (2) the neces-
sity of using a large portion of the assets in order to pay
the debts of the deceased, or (3) the use of a large portion
of the assets to pay taxes, usually the Federal Estate Tax.
This situation raises the problem of the priority rights of
the various types of legatees and devisees to payment in
full of their respective legacies and devises. This order of
priority in payment, where the assets are insufficient to pay
all, is the inverse of the order of abatement of legacies and
devises for the purpose of paying debts of the estate and
costs of administration.
HisTo cAL DovELO NT
In the development of the feudal system in England, the
protection of rights in land came within the jurisdiction of
the manor courts, while the administration of decedents'
estates came under the control of the ecclesiastical courts.
As a result of this division in jurisdiction, the principle
became firmly established that the title to real property
devolved directly to the heir in case of intestacy or to the
devisee in case of testacy, and that only personal property
passed to the administrator or executor as an asset of the
estate. As a consequence of this devolution of title, real
property was not subject to the debts of the deceased, ex-
* A.B., 1931; LL.B., 1927, University of Illinois, LL.M., 1940, Columbia
University; Professor of Law, University of Maryland School of Law.
MARYLAND LAW REVIEW [VOL. XVII
cept in the cases of debts arising out of specialties and then
only if the specialty was expressly made binding on the
debtor's heirs. In such cases the heir became bound by
contract upon the decedent's debt to the extent of the real
property inherited from the debtor. But even in this case
of a debt arising on a specialty which expressly bound the
heir, the debtor could defeat the right of the creditor to
reach the realty by devising the land to persons other than
the heir at law. In 1691 the Act against Fraudulent Devises1
was enacted making the devisee of land subject to liability
for specialty debts of the testator on the same basis as
the heir.
Thus in colonial Maryland land of the decedent was not
subject to his simple contract debts, but only to his specialty
debts and then only if the specialty expressly bound the
heir.2 To eliminate this distinction between specialty debts
and simple contract debts of the decedent, the Act of 1785s
was enacted making the real property of the decedent sub-
ject to the claims of all types of creditors of the estate after
the personalty has been exhausted. This statute has the
effect of making the personal property of the decedent in
the hands of the administrator or executor the primary
source of funds for the payment of the debts of the estate,
and only permits equity to intervene and sell the realty
in the hands of the heirs or devisees upon proof of an in-
sufficiency of personal property in the estate to pay such
debts.
Since the Act of 1916 Directing Descent4 provides for
the descent of real property to the same persons who are
the distributees of the personal property and in the same
proportions, there is no financial loss in case of intestacy
to any heir from the application of this principle that ex-
hausts the personalty in the payment of the debts before
touching the realty. As the heirs taking the realty are the
same persons as the distributees taking the personalty and
take in the same proportions, it is immaterial to them
whether the personalty or realty is sold first to pay debts.
But in the case of a will, the devisees of the realty may be
entirely different persons from the legatees of the per-
sonalty. Thus in the case of testacy the application of this
principle may operate to deprive the legatees of all or a
major portion of their share in the estate, while leaving
13 W. & M. Ch. 14, 2 Ar .BRIT. ST. (2d ed. 1912) 781.
2Van Bibber v. Reese, 71 Md. 608, 18 A. 892 (1889).
8 MD. CoDE Supp. (1957), Art. 16, Sec. 254.
'MD. CODE (1951), Art. 46, Sec. 1.
1957] ABATEMENT - LEGACIES AND DEVISES 287
the devisees their entire share without diminution for pay-
ment of the debts or costs of administration.
The Maryland Court of Appeals has consistently taken
the position, that in the case of testacy as well as in the
case of intestacy, the realty cannot be reached for the pay-
ment of debts until the personalty has been exhausted;5
unless the testator has by the terms of his will shown an
intention to exonerate all or part of the personalty from
the payment of debts, or has shown an intent to charge
the payment of some or all of the legacies against his realty.
Although the testator cannot by his will remove personalty
from the reach of his creditors, he can charge the realty
with the payment of his debts and exonerate any or all
personalty from such payments.' In such cases the legatees
are entitled to have equity sell the realty for the payment
of decedent's debts without first exhausting the personalty.
But a mere direction in the will to pay all debts before the
devises and bequests are paid cannot in itself be a basis for
charging the realty with the payment of the debts jointly
with the personalty.7 On the other hand, many states have
taken the position that the blending of the residuary realty
and personalty into a single clause does show an intent to
charge the residuary realty with the payment of general
legacies, thereby exonerating these general legacies from
the payment of the debts at the expense of the residuary
realty.8 Certainly it can be argued, that where a testator
disposes of his residuary realty and personalty in a single
clause to the same person, he has shown an intention to
treat residuary realty and residuary personalty the same,
and that he was thinking of the residue as consisting of
both realty and personalty remaining after all other dev-
isees and legatees in his will had been paid in full. Yet
even in this situation the Maryland Court of Appeals has
5 However, in the case of specialty debts expressly binding on the heir,
which by the Act against Fraudulent Devises, supra, n. 1, are also binding
on a devisee, the specific devisee of realty becomes primarily liable under
the terms of specialty. In Chase v. Lockerman, 11 G. & J. 185 (Md., 1840),
the Court of Appeals held that a specific legatee whose property Is used
to pay specialty debts of the estate has a right of contribution against a
specific devisee. Likewise, in Knox v. Stamper, 186 Md. 238, 46 A. 2d 361
(1946), this possibility was recognized but taxes and administration ex-
penses were held to be simple contract debts and not to be classified as
specialty debts. Because of the disappearance in business usage of special-
ties expressly binding on the debtor's heirs, It is doubtful as to whether this
right of contribution in the specific legatee against the specific devisee has
any significance today.
I Buchanan v. Pue, 6 Gill 112 (Md., 1847).
White v. Kaufman, 66 Md. 89, 5 A. 865 (1886).
8 Michigan Trust Co. v. Driver, 270 Mich. 698, 259 N. W. 867 (1935) ; In
re Kendrick's Estate, 210 Wis. 218, 246 N. W. 306 (1933).
MARYLAND LAW REVIEW [VOL. XVII
taken the position that the intent to exonerate the general
legacies from the payment of the debts at the expense of
the residuary realty and to charge the residuary realty with
the payment of such general legacies cannot be read from
the words of the will.' Under these cases neither intestate
realty, residuary realty, nor realty specifically devised
could be used to pay debts until all of the personalty had
been exhausted, and likewise the general legacies were
not payable out of either residuary or intestate realty.
In 1894 the first breach in this historic principle occurred
with the enactment of the present statute which makes "the
real estate of every testator not specifically devised" charge-
able with the payment of pecuniary legacies, where the
personalty is insufficient after payment of debts, unless
the contrary intent clearly appears.0 This statute uses the
words "not specifically devised" in describing the realty
charged with the payment of general pecuniary legacies.
These words clearly include realty devised in the residuary
clause, whether it is a single clause blending both residuary
realty and residuary personalty together, or whether it is
a separate residuary devise to a person other than the resi-
duary legatee; but the wording is ambiguous as to whether
it includes intestate realty where the will contains no resi-
duary devise. However, the Maryland Court of Appeals
has construed these words to include intestate realty as
well as residuary realty." This leaves only realty included
within a specific devise still subject to the old principle
that personalty is the primary fund for the payment of
debts, and that realty cannot be charged with the payment
of general legacies.
PREsENT ORDER OF ABATEMNT
The effect of this statute, in making both intestate and
residuary realty subject to the payment of pecuniary gen-
eral legacies, is to create a revised order of abatement as
follows:
1. Intestate Personalty. Under common law principles
any intestate personalty was the first source of funds for
the payment of debts of the estate. Normally there can be
no intestate personalty if the will contains a residuary
legacy; but if the residuary legacy or any part thereof is
$White v. Kauffman, supra, n. 7; Pearson v. Wartman, 80 Md. 528, 31
A. 446 (1895), where the clause "the remaining portion of my estate" was
used.
10MD. CODE (1951), Art. 93, §361.
1 St. Johns Church v. Dippoldsmann, 118 Md. 242 84 A. 373 (1912).
1957] ABATEMENT - LEGACIES AND DEVISES 289
void, then intestate personalty may exist in the hands of
the executor for the payment of debts of the estate.
2. Residuary Legacy. As just pointed out, if the will
contains a valid residuary legacy, there can be no intestate
personalty, and the residuary personalty becomes the first
source of funds for the payment of debts of the estate. The
very use of the term "residue" shows an intention to charge
the general legacies against the residuary personalty, so
that the residuary legacy must abate in favor of the general
legacies. 2
3. Intestate Realty. Here also there will normally be no
intestate realty if the will contains a residuary devise.
But often wills are executed without a residuary devise
where the testator has disposed of all the realty that he
owned at the date of the execution of the will by specific
devises. Likewise, a residuary devise may be void in its
entirety or in part; and also under Maryland case law
realty devised by a void specific devise passes as intestate
realty and does not fall into the residuary devise." Prior
to the enactment of the Act of 1894" such intestate realty
could not be subjected to the payment of the debts of the
estate until all the personal estate had been exhausted. 5
This meant that neither specific legacies nor general legacies
could be exonerated at the expense of the heirs taking the
intestate realty. Now this statute changes this rule to the
extent of making intestate realty subject to the payment
of pecuniary legacies. It should be noted that the statute
uses the term "pecuniary legacies", which comprises all of
the usual general legacies found in a will,0 but does not
include specific legacies. This presents two problems of
"England v. Prince George's Parish, 53 Md. 466 (1880); Church Ex-
tension M. E. Church v. Smith, 56 Md. 362 (1881).
18D isposition of Void and Otherwi8e Failing Devises in Maryland, 2 Md.
L. Rev. 142 (1938).
11S upra, n. 10.
'3Chase v. Lockerman, supra, n. 5, lists the order of abatement at com-
mon law as follows:
1. Personal estate.
2. Lands devised to be sold for the payment of debts.
3. Lands descended.
4. Estates specifically devised even though they are generally
charged with the payment of debts.
"Cases have often construed a gift of a certain number of shares of stock
or a sum of money in bonds, without describing the particular stock or
bonds other than by the name of the corporation, as being a general legacy.
Dryden v. Owings, 49 Md. 356 (1878). In such cases if the stocks or bonds
are not in the estate at the testator's death, the legacy Is treated as a
pecuniary legacy payable out of general assets. Robinson v. Addison, 2
Beav. 515, 48 Eng. Rep. 1281 (1840) ; Mecum v. Stoughton, 81 N. J. Eq. 319,
86 A. 52 (1913). Under this reasoning all such general legacies can be
considered pecuniary legacies and within the Act of 1894.
MARYLAND LAW REVIEW [VOL. XVII
interpretation: first, can the executor petition equity for
the sale of the intestate realty upon a showing that the per-
sonal estate will be insufficient to pay the debts and the
general legacies; and second, if the personal estate is ex-
hausted in the payment of the debts so that the pecuniary
legatees are entitled to payment out of the intestate realty,
are the specific legatees also entitled to reimbursement from
the intestate realty?
The first question was answered in St. Johns Church v.
Dippoldsmann17 where the executor instituted suit in equity
to have the intestate realty sold to pay the pecuniary lega-
cies, the personal estate being insufficient after payment of
debts. The Court held that the executor had no authority
to bring this suit, but only the pecuniary legatees, who had
not received full payment of their legacies, were entitled
to maintain a suit in equity to enforce the lien of their
legacies against the intestate realty. It should be noted
that in this case there was sufficient personal estate to pay
all of the debts, and the suit was instituted by the executor
solely to obtain funds for the payment of the pecuniary
legacies. If the debts had exceeded the personal estate,
then a different conclusion might have been reached on
the theory that by the express terms of the Chancery Act18
the executor has authority to institute a suit in equity for
the sale of the decedent's realty where the personal estate
is insufficient to pay the debts and costs of administration.
But whether the suit is instituted by the pecuniary legatees
themselves or by the executor, the ultimate result is to
abate the intestate realty to pay the debts, thereby exoner-
ating the pecuniary legacies from abatement so long as the
intestate realty is sufficient.
This then presents the second question, namely, whether
the specific legacies can also be exonerated from the pay-
ment of the debts at the expense of the intestate realty. Two
different situations can exist: first, the debts of the estate
exhaust the personalty not specifically bequeathed, such
as the cash on hand, but not the specific chattels which
have been specifically bequeathed by the will. In that case
the general pecuniary legatees would be entitled to pro-
ceed against the intestate realty, and thereby in result the
specific legacies as well as the general pecuniary legacies
have been preferred over the intestate realty. Thus in-
testate realty has abated in favor of both specific legatees
17 Supra, n. 11.
8M D. CODN, SuPP. (1957), Art. 16, §254. Likewise, MD. CODE SuPP. (1957),
Art. 93, §315, confers concurrent jurisdiction upon the Orphans' Courts
where the appraised value of the real estate does not exceed $2500.
1957] ABATEMENT - LEGACIES AND DEVISES 291
and general pecuniary legatees. The second situation is
where the debts of the estate exceed the general funds of
the estate so that the specific chattels that have been
specifically bequeathed must also be sold to pay the debts.
Then the question arises as to whether these specific leg-
tees have any right to have the intestate realty charged
with the payment of their specific legacies in the same
manner as the general pecuniary legacies. The Act of 1894,1'
charging the pecuniary legacies upon all realty not specifi-
cally devised, is silent as to specific legacies; so it might be
assumed that the common law principle, making the per-
sonal estate the primary fund for the payment of debts,
applies in a conflict between the intestate realty and specific
legacies. Under such reasoning we would have a result
where the intestate realty would be abated in favor of the
general pecuniary legacies but not in favor of the specific
legacies. In effect the general pecuniary legacies would be
paid in full while the specific legacies would be abated to
pay the debts. This is contrary to the accepted principle
of the common law that between general legacies and
specific legacies, the former should be abated in favor of
the latter.2" The Court of Appeals has not passed on this
problem to date, but it is the author's opinion that the Act
of 1894 should be construed as showing an intention to
make all realty not specifically devised subject to abate-
ment in favor of both specific legacies as well as general
pecuniary legacies. Certainly a testator has as great an in-
tent to have specific legacies paid in full as he has to have
pecuniary legacies paid in-full. And if realty not specifically
devised should be charged with the payment of the latter
it should also be charged with the payment of the former.21
4. Residuary Devise. Prior to the enactment of this Act
of 1894,22 residuary realty like intestate realty could not
be subject to the payment of the debts of the estate until
all the personal estate had been exhausted. With the en-
actment of this statute residuary realty along with intestate
realty became charged with the payment of pecuniary lega-
19Su pra, n. 10.
2 Negro Cornish v. Willson, 6 Gill 299 (Md., 1848) ; Nash v. Smallwood,
6 Md. 394 (1854).
This argument can be stated in the following form:
Specific legacies are preferred over general legacies under common
law principles.
General pecuniary legacies are preferred over intestate and residuary
realty by statute.
Therefore specific legacies are also preferred over intestate and resi-
duary realty.
MD. CODE (1951), Art. 93, §361.
292 MARYLAND LAW REVIEW [VOL. XVII
cies.23 This then raises the same two questions of interpre-
tation of the statute discussed in connection with intestate
realty. If the author's interpretation of the statute is cor-
rect as making both intestate realty and residuary realty
subject to abatement in favor of both specific legacies and
general pecuniary legacies, then the only problem remain-
ing is whether intestate realty must abate before residuary
realty.
At common law all devises of realty were considered
specific due to the fact that after-acquired lands could not
pass under a will, and therefore a residuary devise being
specific would abate proportionally along with other specific
devises.24 However, today in all states a residuary devise
will operate to pass after-acquired lands, 5 therefore a
residuary devise is now considered a general devise that
must abate prior to a specific devise2. ' This principle is
impliedly recognized in the Act of 1894 by charging all
realty except that specifically devised with the payment
of pecuniary legacies. But as between intestate realty and
residuary realty, the statute is silent as to whether in-
testate realty must be abated first. The case of Mitchell v.
Mitchell,27 in a conflict between the heirs and the specific
devisees, recognized intestate realty as the primary source
for the payment of debts of the estate in the absence of
personalty, and it can likewise be argued that the intestate
realty should also be the primary source in a contest be-
tween the heirs and a residuary devisee. In both situations
the devisees whether specific or residuary have been the
express objects of the testator's bounty, while the heirs
have taken by operation of law merely because the will did
not validly dispose of the entire estate of the testator.
Remember, it will not be possible to have both intestate
realty and residuary realty unless some devise in the will
has failed.28 Should the Court of Appeals be presented with
the situation where both intestate and residuary realty
exist in the same estate, probably the Court would con-
sider the intestate realty the primary source for the pay-
ment of debts in the absence of personalty and abate the
intestate realty in favor of the residuary realty.29
Bristol v. Stump, 136 Md. 236, 110 A. 470 (1920).
Lancefleld v. Iggulden, L. R. 10 Ch. App. 136 (1874).
21B ordwell, Statute Law of Wills, 14 Iowa L. Rev. 172, 187 (1929).
In re Nelson's Estate, 278 Pa. 416, 123 A. 326 (1924).
Md. 244 (1864).
221
'Disposition of Void and Otherwise Failing Devises in Maryland, 2 Md.
L. Rev. 142 (1938).
' This clearly would be the result under the provisions of the MODEL
PROBATE CODE (1946), §184 (Michigan Legal Studies - Simes).
1957] ABATEMENT - LEGACIES AND DEVISES 293
5. General Legacies.s0 A general legacy is a legacy pay-
able out of the general assets of the estate and not charged
against a specific chattel or fund. As previously pointed
out, the customary and usual type of general legacy is the
pecuniary legacy. Occasionally courts have construed a
gift of a certain number of shares of stock or a sum of
money in bonds as a general legacy rather than a specific
legacy, where the bequest contained no words describing
the particular stock or bonds other than the corporate
name." In such cases the courts treat the legacy as a
direction to take from general assets either a sufficient
number of shares of such stock or bonds to satisfy the
legacy, or to take money from the general assets sufficient
in amount to buy such stock or bonds at market price.2
Since general legacies are payable out of general assets and
not charged against a specific chattel or fund, the courts
have assumed that a testator would prefer payment of the
specific legacies over the general legacies. Upon this as-
sumption the rule has become firmly established that gen-
eral legacies must abate in favor of specific legacies in the
payment of debts or costs of administration."8 The corollary
of this principle is that the rule that general legacies are
not payable out of chattels or funds that have been specifi-
cally bequeathed by the will but only out of general assets,
and if the general assets are insufficient the general legacies
fail.
Among the general legatees abatement will normally
take place on a pro rata basis, 4 unless a particular general
legacy is entitled to a preference. But certain types of
general legacies have been recognized as being entitled to
a preference over other general legacies. The most im-
portant of these is a general legacy to the widow in lieu of
dower. Since the widow by accepting the general legacy is
waiving her right to dower, she has become a purchaser
of the legacy and should be entitled to preference over all
0T heoretically a general devise might be found in a will in addition to a
residuary devise. An example of this would be a devise of "40 acres of
land" without any designation of the specific tract, followed by a residuary
devise. However, in practice the only type of general devise found in a will
is the residuary devise. Thus we can classify devises in wills in only two
classes: residuary devises and specific devises.
Dryden v. Owings, 49 Md. 356 (1878).
mR obinson v. Addison, 2 Beav. 515, 48 Eng. Rep. 1281 (1840) ; Mecum v.
Stoughton, 81 N. J. Eq. 319, 86 A. 52 (1913).
81N egro Cornish v. Willson, 6 Gill 299 (Md., 1848) ; Nash v. Smallwood,
6 Md. 394 (1854).
8, Matthews v. Targarona, 104 Md. 442, 65 A. 60 (1906).